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Knock it off! Rug makers seek ways to make design pirates pay the price.

Imitation is said to be the sincerest form of flattery, but rug makers who've had their designs ripped off by competitors feel anything but complimented.

While design piracy is nothing new to the area rug business, recent advances in computer scanning technology now permit instant design knock-offs and have pushed this issue to the forefront of concern.

Randy Gardner, vice president of sales for Orian Rugs, explained just how easy technology has made design piracy. He said that a manufacturer can take a necktie and scan it into a computer system and make a rug in that exact pattern that same day.

The practice, which observers say can cost manufacturers hundreds of thousands of dollars, has become such a headache for Oriental Weavers of America that executive vice president Mohammed Sabry refers to it as his "nightmare."

Chas Sydney, vice president of floor coverings at the Atlanta Market Center and chairman of the Area Rug Design Protection Council, agrees that the problem is a disturbing one.

The council, sponsored by the Atlanta Market Center, met to discuss this problem during the Atlanta International Area Rug Market last month.

One point that came from that meeting was that design piracy is an industry-wide problem, according to Sydney. "We all have the same problems. They don't just copy us here in the United States. They do it in China and everywhere else, so it is really becoming a problem. And it's going to be a big problem because this is a growing industry. Competition is extremely intense, and the customer base is shrinking. Everybody is buying everybody else."

The issue of design piracy, rug makers added, is becoming more important as vendors allocate record numbers of dollars to new designs.

"There are a lot of manufacturers who are seeing how successful we are, and they are after our designs," said Sabry of Oriental Weavers, who has three lawsuits pending against alleged design pirates. "They copy them and make them in a cheaper quality. This issue has become a nightmare for those manufacturers who invest a lot of time and money in product design."

"We are very aggressive about this," Sabry said. "We will sue everybody who copies our designs. We will keep on designing and suing more. If somebody copies us, we are going to pursue it."

"There is a lot of copying going on out there," said Paul D'huyvetter, vice president of sales and marketing at Oriental Weavers, who added, "But we are protecting our designs by copyrighting them. Ideally, we as an industry should police ourselves."

In an effort to do just that the Area Rug Protection Council is urging manufacturers, designers and importers to copyright their designs, according to Parry Aftab, legal adviser for the council, formed last year when a group of manufacturers got together in an effort to protect their designs.

Aftab specializes in design infringement litigation in the area rug and furniture industries and leads legal discussions on the issue through America On-Line. She will establish a Web site in early August at to direct individuals to the information needed to register a copyright.

"This makes it easy and inexpensive for the little guys to get this information, Aftab said.

Many importers and manufacturers just don't understand copyright laws or are reluctant to become saddled with the costly legal fees associated with design infringement battles, Aftab explained. "So a lot of the smaller guys get cut out of the picture; this will help. Registering a copyright is relatively easy, the fee is only $20."

Why register your copyright? There are three reasons, according to Aftab. "First, you cannot even start a lawsuit until your have registered your copyright in your work," she said.

"If someone copied from you before you registered your copyright, your remedies in court are more limited. You can still try to get a court order requiring them to stop copying. But if you want money damages, you have a more difficult path if your copyright wasn't registered beforehand," Aftab advised.

A manufacturer can still be awarded actual damages but it is often difficult to prove how many sales a company might have had if the copying had not occurred. When a work is copied from a product or design that has already been registered with the copyright office, however, that person may have to pay up to $100,000 for each willful infringement, plus attorneys' fees. These statutory damages do not require proof of any actual losses, and they are not available if the copying took place before the copyright is registered.

"One final reason for registering a copyright is that registration may well deter someone from copying in the first place," Aftab added.

Gardner of Orian Rugs, Inc. agrees that the practice of copyrighting might serve as a deterrent in the future given an increasing interest in licensed products. "Obviously you don't want to knock off somebody's licensed product," Garner said.

Gardner also said that he does see a lot of "knock-offs" but not much outright, blatant copying right now between machine-made rug companies. Many manufacturers agree with Gardner's observation, but say that obvious copycats should be punished.

But the problem seems to be more serious one for higher-end manufacturers and importers, according to Amir Loloi, senior vice president of Feizy Import and Export of Dallas. Feizy is well known in the industry for the artistry in its traditional and antique-oriented designs.

"There is probably not a single company here in the states that invests more money and time into design than Feizy and our biggest problem is watching people copy our product," Loloi said.

But copyright law has changed over time, and now original designs have greater protection than they did 20 years ago.

Works created before 1978 were covered for 28 years and could be renewed for another 28 years. If the copyright lapsed, then anyone could copy the product. "Currently, the copyright for most creations is life plus 50 years, although it is a straight 75 years if the author of the work is not a person but a company (i.e. work made for hire, anonymous, pseudonymous)," said Aftab.

Now, authors of original works have greater protection; even if the work is not registered and there is no copyright mark on the product a manufacturer or designer can still take steps to stop unauthorized copying, according to Aftab.

One problem, however, is that many rug designs are based on ancient patterns and may not have been changed significantly enough to warrant a copyright, so many manufacturers just don't seek them, Aftab said.

Since many manufacturers don't take the time to copyright their products, they may not be in a particularly strong position to fight piracy. Additionally, taking a chance on a lawsuit -- versus the hundreds of thousands of dollars spent on product design and research each year -- is a cost-effective business decision, several manufacturers pointed out.

Aftab agrees: "It less costly to simply knock off a design and take the chance that you won't be called on it. Right now, its good business to rip off a design." Aftab says her mission as advisor for the Area Rug Protection Council is to make knock-offs less profitable.

The issue of design piracy is also a major one for retailers as well, Oriental Weaver's D'huyvetter said.

"Let's face it," he told HFN, "Unfortunately, the retailers in most cases are the unsuspecting victims. Even a major retailer is not going to be aware of it, they are the innocent by-standers. But we are not going to go after the retailer because in 99 percent of cases they are innocent."

But Aftab says there are "no innocents" in the rugs industry. "Nobody is an innocent when infringement occurs," said Aftab, who often obtains temporary restraining orders and preliminary injunctions in an effort to stop the distribution of stolen designs.

But many times piracy disputes are settled out of court among friendly competitors and the design protection council is encouraging mediation over litigation through the establishment of an alternative dispute resolution service. This body will offer resolution through non-binding or binding mediation, Aftab said, and is expected to be functional within the next nine to 12 months.
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Title Annotation:design piracy
Author:Switzer, Liz
Publication:HFN The Weekly Newspaper for the Home Furnishing Network
Date:Aug 11, 1997
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